Succession planning – what business owners can learn from the Royal family
The recent coronation of King Charles III made me think about how the Royal family have undertaken succession planning and the similarities between the Royals and business owners. After all, Charles has effectively taken over the family business and is now at the helm of a huge operation. Although, none of this has been undertaken without family conflict along the way!
Succession planning is about having a plan for the future success of your business, preparing yourself and your leadership team for the time when you leave the business and potentially passing the business onto the younger generation.
In this blog, I’ll look at some of the areas you should consider around succession planning and what we can all learn from the Royal family.
What you can learn about succession plans from Queen Elizabeth II and the Royal Family
Determine your objectives
Not only did the Queen know that her objective was to pass on the ‘family business’ to her son, but she also had a clear goal of creating a legacy from her rein and leadership. This may be similar to many business owners or you may have a very different end goal.
Your long-term objectives could be to sell the business to an investor or trade purchaser, or you may have key financial objectives you want to achieve, or you may have the objective of creating a legacy for multiple children and family members and passing the business to them.
Stage One of any succession plan should be to start with your end goal, then the remainder of the planning should lead to that end goal.
Set a long-term plan and plan early
The Royal family had decades to plan succession, although it was clear from an early age that Charles was being prepared for his future role, whenever that may happen.
Business owners may not have that length of time to plan, but our advice is always to start early. Whilst you may not be planning to leave the business or pass it on anytime soon, planning for unexpected events such as ill health or death can ensure continuity and the future success of your business whatever the circumstances.
However, a succession plan, when prepared early, should not be set in stone, it must be a changing and fluid document. It should be revisited, tweaked and refreshed as the company and individuals develop.
Do the detail
The succession of King Charles III ascending to the throne was executed with perfection. It was planning, project management and leadership execution at its finest.
Whilst most SMEs and Corporates may not have that level of support and experience, the lesson here is to consider the detail in your succession plan. Only if you ‘do the detail’ will you achieve continuity should the worst happen.
Use various scenarios in your succession planning. It may be you create a 30 day or 100 day plan that should be executed and the steps that need to be taken to execute it. This should include roles and responsibilities, actions, processes and communication.
Consider you successor
Whilst the Queen didn’t have to choose her successor, as it’s clearly mapped out in Royal history, your successor for your business may not be as obvious.
Leading and running a business requires very different skills to those of running the day to day of the business. As a business leader, you need to ensure that your potential successors have the right leadership skills to step up to the role of being the MD/owner or overall leader of the business.
Whether your potential future successor(s) are family members, current management team or an external recruit, you need to be clear on the skills and competencies they need, based on your company culture and your future strategic plans.
Firstly, consider the overall role they need to take when you are no longer there, then map potential successors to the role.
Family businesses can be more complicated
As we’ve seen with the Royal family over the years, family conflict can play a big part in family succession!
Despite the Royal family focussing on developing ownership and commitment to the ‘family business’, as we’ve seen with Harry, this doesn’t often always play out the way one expects!
Family businesses involve a unique combination of personal and professional relationships. We often help clients in avoiding and managing family conflict. When it comes to succession planning, these conflicts can be exacerbated.
Aligning the vision of the senior generation and the incoming generation is crucial to a successful transition. It’s important that the next generation get involved and learn about the business as early as possible. Allowing them to contribute their thoughts for the future will help them to develop a sense of ownership and commitment to the family business in the future.
Preparing your successor
There is no doubt that both the Queen and Prince Philip, The Duke of Edinburgh, spent their seven decades as heads of the Royal family in preparing their children and likely successors for their future roles. The Queen has mentored and coached all her children and especially Prince Charles in their public roles.
You are undoubtedly the best person to develop, coach and mentor your successor. You need to be there, if possible, to offer guidance and feedback to your successor. Along the journey, you should share your insights, knowledge and advice on different challenges and opportunities that running a business provides.
The more your successor can work alongside you, be part of the strategic planning process and be able to question, challenge and support you, the more likely they are to be prepared for their future role.
Know when it’s time to leave
Although the Queen continued serving for the ‘whole of her life’ as she had promised, there were many times that there were calls for her to step down and let the next generation take the reins. In recent years, we have seen her ‘step down’ gradually from public responsibilities and let Charles and William take on more of that day-to-day responsibility.
One of the challenges we see business owners wrestle is ‘letting go’ of the business, passing on the reins and preparing for exit. It will be much better for your successor if you gradually move yourself out of the business. This may be by allowing your successor to become Managing Director or CEO and you stepping back into a role of Chairman.
Remaining in your business for too long may be damaging to the business and the people who will succeed you.
There is no doubt that behind the Royal family is a huge team of ‘experts’ in Buckingham Palace to consult and advise. They have a wealth of private secretaries and advisors, whether it’s public relations, transition management, project management or simply being a sounding board for senior royals.
The same should be true for your business. Whilst the size of the team will not be as big as the Royals, ensuring you have trusted advisors and a quality senior management team, not only during the growth of your business, but to assist you with your succession planning. This team will ensure that a smooth transition takes place and future generations achieve their goals.
We have a lot to learn from the Royal family
One of the main things business leaders can learn from the Royal family is that meticulous planning will make succession and transition as smooth as possible. Through careful and precise succession planning, your business and your successors can continue to thrive and grow in the future.
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